Gold price broke support last week. During today’s early trading, we saw stops getting hit ferociously and bringing the price to the area around $1,080. Gold price has bounced towards $1,115 but still remains below the previous long-term support of $1,130. Is the decline in Gold over? Most probably not.
Blue line- trend line resistance
Gold prices remain below the trend-line resistance and below the Ichimoku cloud. The trend remains bearish. The price collapsed as it activated sell stop orders earlier today and moved towards $1,080. The bounce so far has managed to retraced nearly 38% of a decline, which is a usual and normal bounce. The trend should continue lower. A daily close above the 38% retracement could push the price even higher towards the 61.8% retracement or even the cloud resistance.
Blue line – long-term support
The weekly chart remains fully bearish with both kijun- and tenkan-sen now with a negative slope and new lows. This is not a good sign although I cannot rule out a short-term bounce to test the breakdown area. So, a bounce towards $1,140 should not be excluded. In general, I would remain bearish in the long term as I believe we could see a test of $1,000.
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